Ajax Corporation estimates that for credit sales, 20% of cash is received in the month of sale; 60% in the month after the sale, and 15% second month after the sale. The remainder is never collected. Ajax had credit sales of $23,000 in January; $23,000 in February, and $19,000 in March. Given the following information, determine the cash collections for March.

Question

Quizplus · Accepted Answer

For March, the cash collections include:- 20% of March sales: 0.20 * $19,000 = $3,800- 60% of February sales: 0.60 * $23,000 = $13,800- 15% of January sales: 0.15 * $23,000 = $3,450Adding these amounts gives the total cash collections for March: $3,800 + $13,800 + $3,450 = $21,050. However, none of the options exactly match this calculation, suggesting a possible miscalculation or misunderstanding of the question's requirements. Given the options, the closest and most logical choice based on the provided calculation would be $20,600, acknowledging a discrepancy in the calculation process.

Ajax Corporation Estimates That for Credit Sales, 20% of Cash